DICTIONARY
The business owner's dictionary
The terms an established practice runs on — what they mean, and what changes once you can name them.
All terms52 terms
A
- Accounts receivable
- Work you have invoiced but not been paid for — revenue on the books that cannot pay a salary yet.Money
- Attribution
- Deciding which marketing effort gets credit for a sale — always an approximation, and dangerous when treated as a fact.Growth
B
- Backlog
- The list of work agreed but not started — useful when it is ranked and honest, and a source of guilt when it is neither.Product
- Base rate
- How often something happens across all comparable cases — the number your own optimism is measured against.Judgement
- Bottleneck
- The single slowest step in a process — the only one where an improvement changes the total output.Operations
- Brand
- What people expect from you before you say anything — a reputation held in other people's heads, not a logo you own.Audience
- Break-even
- The revenue at which the business stops losing money: fixed costs divided by contribution margin per sale.Money
- Burn rate
- The net amount of cash the business loses each month — money out minus money in.Money
C
- Capacity
- How much work the business can actually deliver in a period — measured in the constrained resource, not in optimism.Operations
- Cash conversion cycle
- The number of days between paying to deliver work and being paid for it — how long your own money funds your customers.Money
- Change order
- A written amendment recording a change to an agreed scope, its price and its effect on the date — the mechanism that makes "yes" affordable.Operations
- Churn
- The share of customers or subscribers who stop paying in a given period.Growth
- Contract
- A written record of what each side promised — most useful long before any dispute, as the thing you both check.Legal
- Contribution margin
- What one extra sale contributes toward fixed costs and profit: its price minus the variable cost of serving it.Money
- Conversion rate
- The share of people who take the next step you asked for, out of everyone who could have.Growth
- Customer acquisition cost
- The fully loaded cost of winning one new paying customer, sales and marketing included.Money
D
- Deferred revenue
- Money you have been paid for work you have not delivered yet — cash in the bank that is still a liability.Money
E
- Email list
- The set of people who agreed to hear from you directly — the most durable owned channel most businesses will ever have.Audience
- Escalation
- The agreed route by which a problem reaches someone able to decide — written in advance, so nobody has to invent it mid-crisis.Operations
F
- Funnel
- The ordered steps between a stranger seeing you and paying you, measured so you can see where people stop.Growth
G
- Gross margin
- What is left of a sale after the direct cost of delivering it, as a percentage of revenue.Money
H
- Handoff
- The moment work passes from one person to another — the most common place for it to stall, and the least measured.Operations
I
- Ideal customer profile
- A description of the customer your offer serves best, written from evidence rather than aspiration.Audience
- Intellectual property assignment
- The clause that transfers ownership of what was created from the person who made it to the person who paid for it.Legal
L
- Liability
- What you can be held responsible for if the work causes harm — and, in a contract, how much of that you have agreed to carry.Legal
- Lifetime value
- The total gross profit one customer produces across the whole time they stay with you.Money
- Loss aversion
- The tendency to feel a loss more strongly than an equivalent gain — which makes protecting what you have beat pursuing what you want.Judgement
N
- Net margin
- What the business actually keeps after every cost, as a percentage of revenue — the number gross margin flatters.Money
- Niche
- The narrow group you choose to be the obvious answer for — chosen by exclusion, not by topic.Audience
- Non-disclosure agreement
- An agreement not to share specified information — routine between working parties, and near-useless as a way to protect an idea.Legal
O
- Offer
- The specific exchange you are proposing: this result, for this person, at this price, on these terms.Audience
- Opportunity cost
- The value of the best thing you gave up in order to do the thing you chose.Judgement
- Owned audience
- The people you can reach without permission from a platform — a list you hold, not followers you were lent.Audience
P
- Payback period
- How many months a customer takes to repay what you spent winning them — the speed at which growth returns its own cash.Growth
- Positioning
- The place your offer occupies in a buyer's head — who it is for, what it replaces, why it wins.Audience
- Pricing power
- How much you can raise your price before customers leave — a measure of how replaceable you are.Money
R
- Referral loop
- A repeatable path by which a satisfied customer produces the next one — deliberate word of mouth rather than lucky word of mouth.Growth
- Retainer
- A recurring fee for ongoing access or a defined monthly scope — predictable revenue, and the easiest agreement to lose money on.Money
- Retention
- The share of customers still with you after a given period — the same fact as churn, read from the side that grows.Growth
- Roadmap
- An ordered statement of what you intend to do next and what you are therefore not doing — a sequence, not a calendar.Product
- Runway
- How many months the business can keep operating before the cash runs out, assuming nothing changes.Money
S
- Scope creep
- The steady growth of a project past what was agreed, one small addition at a time.Operations
- Scope document
- The written record of what a project includes, excludes and depends on — the reference that makes a later disagreement checkable.Operations
- Seasonality
- The predictable rise and fall of demand across a year — the pattern that makes a normal month look like a crisis.Growth
- Second-order effect
- What happens after what happens — the consequence of the consequence, which is usually where the real cost sits.Judgement
- Service level agreement
- A written promise about how fast and how reliably you will respond — a boundary as much as a commitment.Operations
- Social proof
- Evidence that people like your buyer already chose you and were glad — the substitute for the judgement they cannot make themselves.Audience
- Standard operating procedure
- A written procedure for work that repeats — the thing that lets a task leave your head without leaving your standard behind.Operations
- Subcontracting
- Paying someone outside the business to deliver work you are contracted for — capacity you can buy, with the risk still yours.Operations
- Sunk cost
- Money, time or effort already spent and unrecoverable — and therefore irrelevant to what you should do next.Judgement
T
- Top of funnel
- The widest stage of the funnel — people who now know you exist but have not asked you for anything yet.Growth
U
- Utilization rate
- The share of paid hours that are billable — the number that decides whether a team of ten earns like a team of ten.Operations